CEO Q&A with Martin Eales at Rainbow Rare Earths Ltd (LON:RBW)

Rainbow Rare Earths Ltd (LON:RBW) Chief Executive Officer Martin Eales caught up with DirectorsTalk for an exclusive interview to discuss their annual results, strong sales, new production from Murambi, exploration and what investors can expect over the coming months.

Q1: Just looking back at how you have performed this year, can you summarise some of the achievements that have been made?

A1: Yes, as I think our announcement this morning puts in the highlight section, there’s a number of things we can be prove of in the year.

Not only have we brought a mine into production on time and on budget, just 11 months from the IPO and the financing but we’ve constructed a processing and achieved our first sales, all within that first year of operation which is an achievement we can be proud of.

Also, within the financial year, we were supported by the market in a fundraising of a further $3.75 million at a premium to the share price and actually, last month conducted another fundraising, also at a premium to the IPO price. So, we’ve got strong support from the market for our ongoing activities.

Alongside all of those things, including first production of sales, just after the year-end we announced a co-operation agreement with a group called TechMet which we enable us to accelerate our investigations into the downstream possibilities for our concentrates. So, we are very excited, we’re looking forward to the positives that’ll come from that.

I think we can just be proud of our safety record thus far, we’ve achieved a million hours of lost-time injury-free. It’s a focus for us as you might expect, we are I guess ‘the only western mining company in Burundi’ so we try and emphasise that the highest safety standards must be met. So, we focus on training and safety and all our workers are properly equipped in a safe manner, so everybody can go home in a safe manner every night. So, we continue to focus on that but it’s an achievement we’re proud of.

Finally, but not least, during the financial year, we announced that our maiden drilling campaign had started, it’s already into Phase II in an area called Kiyenzi within our deposit and we expect that drilling to form the foundation of the maiden JORC resource we expect to put out in Q4.

Q2: How are the Rainbow Rare Earths’ sales going at the moment?

A2: Sales are very strong, I suppose the only limitation for us is that we have been ramp up and we’d like to be able to produce and sell more because demand is very strong and consumer feedback is very positive.

In the financial year, we exported from Burundi 575 tonnes of concentrate, we’ve sold 475 of those as of 30th June but the balance sold very soon after the year-end. Actually, from our perspective, sales and demand is not a problem and our focus is on getting production up because sales are very strong and there’s a real demand for our product.

Q3: What can you tell us about the new production coming from Murambi, how’s that going?

A3: We trailed earlier in the year that Murambi would be our second mining area. All is progressing as planned, it will be producing ore for concentrate production in the final quarter of this calendar year so October, November and December. That enables us to step up our production materially from this boosting level coming from Gasagwe such that we can target the year-end run rate we’ve long had in mind of 5,000 tonnes a year of concentrate.

Q4: How is the exploration front progressing?

A4: So, I briefly referenced this area called Kiyenzi a second or two ago.

Kiyenzi was always interesting to us because casting our minds back to the start of this year when we started drilling, we found that Kiyenzi not only hit some very high-grade boulders at the bottom of the hill which can only have eroded from further up which we indicative of rare earth mineralisation in the hill.

We conducted a ground-based gravity survey that revealed something very interesting In Kiyenzi and the drilling in Phase I we undertook, what we found there is some rare earth mineralisation that’s over a much larger extent than the high-grade veins we’ve been mining thus far.

So, in a nutshell, we found lots of rare earths on a per metre cube basis, perhaps the grade is not as high or as concentrated as in the narrow grade but there’s much more of it. So, we think that maybe more likely amenable to mechanised mining therefore we can do greater volumes through the plant. So, we think Kiyenzi’s looking very positive and as I say, it will form the bulk of the resource we hope to put out in Q4.

Alongside that, we’ve also done exploration work as Gasagwe where we’re mining, at Murambi where we start mining very soon and at a new area called Gomvyi, so all of those four areas added together will form our resource number.

Q5: Finally, what should shareholders be looking out for over the coming months from Rainbow Rare Earths?

A5: I think if I could boil it down to three things that we expect to happen before this year-end, it would be Murambi coming on stream, publication of the JORC resource and us ramping up production to that long-held target of 400 tonnes a month. I think even before then, we fully expect to be able to put out some positive news on being able to produce on a positive cash flow basis, on a monthly basis.

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